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The Beginning of the End? (Imperial Decline part 3)

This is the the third in a series of posts looking at the theories of Giovanni Arrighi, Sam Gindin, Leo Panitch, and others. The first post asked the question of how working-class interests align with anti-militarist demands, while the second post described Arrighi's thoughts on the connection between capitalism and militarism. This post looks at the historical rise and decline of empires.

Let’s take a closer look at what happens when the hegemonic center of the world-system changes. This will bring together some of the ideas we mentioned in the first two posts.

Arrighi claims there is a recurring pattern in the world economic system, and that each cycle is dominated by a hegemonic power: Genoa, Holland, the U.K., and the U.S. In each cycle, a period of expanding trade and production runs into the challenge of intensifying inter-capitalist competition. The capitalist class then shifts investment from production to finance, which allows the hegemon a belle époque of profit and power. But this maneuver fails to solve the obstacles to economic expansion that drove capital out of production, and so is merely a prelude to the hegemon’s decline.

When the world-system has encountered a limit to continued growth, what might provide a way out of the impasse? Arrighi uses concepts developed by David Harvey to answer this within the context of the system as a whole, rather than a particular national economy. He argues that the capitalist system can supersede its recurring limits through a ‘spatial fix.’ The term denotes the remaking of economic geography through a variety of means -- investment in infrastructure and other forms of fixed capital, reallocation of the production and distribution process, or radically changing the lived environment. By integrating previously far-flung locations within new circuits of the capital accumulation process, capitalists can exploit new economies of scale, assets, or labor reserves, and create new markets for their commodities. Although called a spatial fix, there is a temporal aspect to all this as well; over-accumulated capital can be invested in the large, long-term projects necessary to create a new spatial fix, which will materialize profits over the course of a longer-than-normal time frame. Offshoring, containerization, and railways, but also the interstate highway and suburbanization: ‘spatial fix’ encompasses all this.

Political power is crucial to all this, as the creation of a new spatial fix typically means dismantling or devaluing the structures that sustained a prior economic order; and the way geography will be reshaped depends on the exercise of power. Capitalist imperialism, then, is the attempt by capitalist powers to use coercion “to turn in their favor the spatial shifts entailed in the ‘endless’ accumulation of capital and power” (229). The hegemonic power is the victor in this struggle, who also reorganizes the capitalist world-system so as to create the conditions for renewed expansion.

The capitalist class of the declining hegemon, however, is typically enmeshed in the depredations of financial capital. Finance capital will tend to resort to an upward redistribution of wealth – Harvey’s accumulation by dispossession – in order to compensate for the blockages in the circuits of trade and production, rather than attempt to overcome those blockages. Besides generating massive inequality and legitimacy crises, this tendency means the hegemon’s capitalists will not direct the global economy in the interests of the world-system rather than its narrow ones.

We now need to ask – as we have throughout our examination of Arrighi’s thought – whether this process of encountering and then superseding the limits of capital may relate to the sphere of geopolitics. War and militarism feature here as the crucial links.

The Italian city-states pioneered a form of military Keynesianism in the 15th century by paying wages to soldiers who then spent their money within the domestic economy, driving growth and tax revenues for future military spending. The attempts by European powers to appropriate the wealth and power of the city-states led to an escalating conflict that eventually strained their finances, while war disrupted trade. The resulting fiscal problems were major factors in the breakdown of the medieval system during the 16th and 17th centuries.

This system-wide chaos created a system-wide interest among the ruling classes – for a tamping down of the unmitigated power struggle, and for a hegemon with the capacity to lead the international state system towards that goal. This was the role the Dutch would play, coming out of the Peace of Westphalia. Yet the Dutch-centered system generated rival mercantilist empires, which sought to replicate the Dutch’s economic success. The resulting struggles between subjects and rules, colonies and metropoles over the costs of the main conflicts between these empires – particularly between Britan and France – led to a wave of rebellions that generated independent states out of former settler colonies.

Britain’s hegemony came as a result of leading a ‘vast alliance of primarily dynastic forces’ against the Napoleonic threat to the system of inter-state relations established in the Peace of Westphalia, and towards accommodation with the modern revolutions. The system of free-trade imperialism was their response to this difficult situation.

Finally, the US post-WW II role as Western hegemon was to stabilize the conflict between revolutionary (socialist), reactionary (Axis) and conservative (Allied) blocs. Arrighi claims the diffusion of the welfare state system was the tool the U.S. used towards this end.

Two things seem to be going on here. First, a condition of systemic political chaos accompanies the grinding down of economic expansion. A new hegemon must forge both a new ‘spatial fix’ to overcome the limits to capital accumulation, but also a political order that restores governance to the world-system. Empirically, especially as we saw in our first post, economic and political turbulence seem to correspond to, indeed feed into, each other. At the level of theory, however, there does not seem to be a simple mechanism to explain this correspondence.

Second, once the continual conflict between rival powers escalates into all-out warfare, the “newly emergent center is better positioned to provide a spatial fix.” This may be through manipulating the balance of power, intervening at a crucial moment to decide the winner – as the U.S. did in World War II – or by taking advantage of the mounting war debts accrued by belligerents.

Within Arrighi’s framework, the politics of the U.S. neocons appear as a gambit to work against the historical tide, by creating a global political order – Arrighi calls it a ‘world state’ – that would entrench the absolute domination of the U.S. state. Its failure portends the beginning of a new chapter in the history of capitalism.

The views expressed here are those of the author and do not necessarily represent those of the entire War Times project

Lynn Koh is a long-time activist in the anti-war movement, and is a labor organizer in the Bay Area.

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